Thirumalai Pillai and Others vs Arunachella Padayachi and Others

Phillips, J.—This is an appeal by the trustees of the Pachayappa''s Charities to recover rent from the respondents. The appeal was filed by

all the nine trustees, but, since the appeal was filed, two of the appellant-trustees have died and one has retired. Of the two trustees who died, one

died only on 21st March 1915, and, therefore, there is plenty of time to bring in his legal representative or the person on whom his interest has

devolved; but objection is taken by the respondents that No. 6, Mr. Ethiraja Mudaliar, having died in 1923, and No. 5, Sir P.T. Thiagaraja

Chettiar, having retired on 29th April 1924, the application to bring in the three trustees who have since been elected on the Board is out of time

and that, therefore, the appeal should be dismissed in limine. The contention for the respondents is that the new trustees who have been appointed

by election to fill the places of those who have died or retired are their legal representatives within the meaning of Section 2, Clause (11), of the

Civil P.C., but in that section we find that "" legal representative"" included "" where a party sued in a representative character, the person on whom

the estate devolves on the death of the party so suing or sued."" When Mr. Ethiraja Mudaliar died, his estate as trustee devolved on no one, unless

it can ''be deemed to have devolved on the surviving trustees, who are parties to this appeal. Certainly it cannot be said that his estate devolved on

his death on a person who was subsequently elected to fill his place. The act of the electors can certainly confer no retrospective power on the

person elected so as to vest the estate of the deceased in him. So far as No. 5 is concerned his office became vacant by retirement and not by

death. On the date of his retirement, the person subsequently elected to succeed him was certainly not his legal representative within the meaning of

Section 2, Clause(11), Civil P.C. Consequently these persons, now sought to be added as appellants, do not come within the meaning of legal

representative."" For the appellants it is contended that Order 22, Rule 10 is applicable and I see no reason why it should not be so. The estate of

the deceased trustees has devolved on these persons by the act of the electors done in pursuance of the scheme framed by this Court, and it

appears to me that it is a case of devolution of the interest during the pendency of a suit. A similar view was held by a Bench of this Court in

Sundaresam Chettiar v. Viswanatha Pandara Sannadhi AIR 1922 Mad.402 and by another Judge in Ratnam Pillai v. Nataraja Desikar AIR 1924

Mad. 615. I see no reason to differ from the view and hold that these persons can be added as parties under Order 22, Rule 10. In these

circumstances, it is unnecessary to discuss the further question whether the trustees who have all along been on record can be allowed to continue

the appeal on behalf of the whole body of trustees without adding the trustees subsequently elected.

Coming to the merits of the appeal, two points are argued. The appellants claim firstly the loss which they have suffered owing to the

depreciation of Government promissory-notes deposited by the defendants in respect of the lease which they obtained from the appellants. ''The

second question relates to the amount of water-rates payable by the defendants. As regards the second point I may say that, on a construction of

the lease, defendants are liable to pay water-rate for water taken to punja lands; for water taken for second crop on nanja lands; and for water

taken to poramboke. The learned Judge has only considered one of the provisions of the lease which relates to poramboke, but does not appear

to have considered the earlier clauses at all, and the learned Judge''s judgment is not supported by the respondent''s vakil who admits that the

construction put upon the document by him is incorrect. In this respect, the Munsif''s decree must be restored.

The more important point is the question of depreciation of Government promissory-notes. When the respondents obtained the lease, they

deposited a sum of Rs. 5,300 with the appellants. This amount was equivalent to one year''s rent of the lands, the lease being for five years. Soon

after the deposit was made the appellants wrote to the 1st defendant and suggested that the money should be converted into Government

promissory-notes. Defendant agreed to this course in his letter of 30th April 1913 saying: ""Accordingly I am willing to purchase and keep

Government bonds bearing 3-1/2 per cent. per annum:"" Subsequently, the actual lease deed was executed on 26th May 1914 and that deed

contains the following recital, "" As the understanding is that Government promissory-notes should be purchased and kept for the said cash deposit,

etc."" So far, the documents show clearly that the defendant agreed to the purchase of Government promissory notes on his behalf as the equivalent

of the cash deposit made by him, and the method in which that deposit was to be applied is mentioned in the lease deed, Ex. B. The question really

at issue is whether these promissory-notes which have depreciated very considerably by the end of the lease when the deposit had to be applied in

payment of the last year''s rent, belonged to the appellants or respondents. It is not disputed that the cash deposit belonged to the respondent, and

it is on record that the respondent agreed to that cash deposit being converted into Government promissory-notes. It is difficult, therefore, to

understand the contention that this conversion of cash into notes had also the effect of transferring the property in them from the respondent to the

appellant unless there was some contemporaneous agreement to that effect. The learned Judge does not appear to have considered at all the

question of the property in these promissory-notes and has based his decision on certain findings as to what the defendants understood. I may say

at once that in several eases, apart from the condition as to payment of water-rate, the learned Judge has obviously misconstrued the documents.

In one case, namely, Ex. 9, he apparently has only read the document perfunctorily, for he gives its contents accurately as mentioned on the

docket: but when the document itself is read it appears that the docket is not accurate and it would appear that the learned Judge has relied solely

upon the docket without reading the actual document. That by itself would be sufficient to vitiate his judgment, but it is also clear that he has not

applied his mind in the right direction. The learned Judge starts by thinking it a most extraordinary thing, that, when Government promissory-notes

stood at about 98, the appellants should have purchased notes of the face value of Rs. 5,500 instead of notes of the face value of Rs. 5,300

considering the cash already in their hands was sufficient to purchase notes to the extent of nearly Rs. 5,500 (plus interest accrued to date) in view,

as they said, to secure against loss by depreciation. If there were depreciation below the price at which they purchased, and notes only of Rs.

5,300 were purchased, the appellants might be put to great loss as the security would be inadequate. As it is, even after taking this precaution, the

value of the notes has fallen far below the amount due by the defendants. There was, therefore, nothing surprising in the appellants purchasing notes

of the value of Rs. 5,500.

The main ground for finding that defendants were not liable for the depreciation is that there was no understanding on their part that they would

be liable for any depreciation in value; but when a man owes promissory-notes, he must know that, if they depreciate in value, he will he liable for

such depreciation and not a third party, unless there is an agreement to the contrary. His misunderstanding on this point, if there was any, would be

merely due to ignorance of ordinary business principles of which any man should be deemed to have knowledge. Every man knows that he is

responsible for the condition of his own property and when that changes,, the responsibility is his and not that of a third party. ""Whether the

defendants really understood their position or not is immaterial in this case. The property in the notes was theirs and, therefore,, when the notes

depreciated they must bear the loss.

An attempt has been made to show that the property in the notes was not defendants'' and reliance is placed on a letter by the Bank to the

trustees. How that could effect a transfer of property I do not understand. The contention is quite worthless. The defendants accepted the change

in the nature of their property and had never repudiated it any time. They are, therefore, liable for this depreciation. The appellants would have

been entitled to realize the security in their hands, at the end of the lease,, but, as a matter of fact, they merely credited the market value of the

notes at that date and asked the defendants to pay the balance; in fact, they even offered to return the notes if the defendants would pay the proper

amount in cash. The Judge was, therefore, quite wrong in saying that the defendants were never consulted before the Government promissory-

notes were sold. This is yet another question of fact in which the Judge is completely wrong. Considering all these circumstances, the judgment,

appears to be most unsatisfactory.

The decree of the lower appellate Court must be set aside and the decree of the District Munsif restored with costs-both here and in the lower

appellate Court.